Mongolian coking coal prices trended lower at China's largest inland border port of Ganqimaodu, as downstream users shunned high-priced supplies and adopted a prudent buying stance.

 

Mongolian 5# raw coking coal prices were offered at 1,650-1,700 yuan/t, ex-stock Ganqimaodu with VAT, down slightly by 20 yuan/t compared with the start of the week and falling 50-80 yuan/t so far in December, Sxcoal's data showed.

 

Growing wait-and-see stance among Chinese downstream users has led to subdued trading activities, forcing some traders to further cut prices.

 

Online coking coal auction through Mongolian Stock Exchange also settled with a much lower price on December 13.

 

Mongolian miner Energy Resources concluded an auction for 128,000 tonnes of #3 washing hard coking coal (S 0.85%, A 11%, VM 28%, GRI 75) at price of 1,340 yuan/t, marking the lowest level since October 13.

 

The price, which was down significantly by 70 yuan/t compared with the previous trading level a day earlier and fell by 160 yuan/t from a recent high seen on December 4, suggested conservative buying intentions from Chinese buyers.

 

Despite a slight improvement in coke-making profit following the completion of the third round of coke price hikes, the overall buying strength from coking plants was not robust and many were still inclined to temporarily make on-demand purchases.

 

This came partly as participants were not optimistic over the subsequent demand for coke as the steel market entered its traditional off season in winter and traders retreated to the sidelines.

 

"Some steelmakers' good demand for coke at present is partly attributed to the snowfall-restricted logistics that have hindered their restocking for the material," said one trader source.

 

However, as long as the impact gradually fades, demand for coke is highly likely to reduce, given increased maintenance plans for blast furnaces and subdued steel consumption in winter, he said.

 

"Some coke producers reportedly are mulling over a fourth round of price hike, but that would be challenging to materialize," the source noted, adding the third increase has already encountered greater challenge following a week's tug-of-war with steel makers.

 

A second trader source at an eastern port in Shandong disclosed a lack of profitability for them to buy coke after third price hike, with the immediate costs far exceeding the mainstream selling levels at the port-side market.

 

In the domestic coking coal market, sentiment was slightly buoyed by tightened supply following the recent strong snowfalls in production areas of Shanxi, with backbone grades experiencing continued upticks.

 

However, participants doubted about the continuity of the price rise and reckoned the recent rebound would be short-lived.

 

Blending coking coal prices remained on a downtrend due to a lack of demand. Some online coking coal auctions continued to fail amid coking plants' resistance to the heightened prices.

 

On December 13, the CCI indexes for Shanxi mid-sulfur and high-sulfur primary coking coal fell to 2,340 yuan/t and 2,323 yuan/t, ex-washplant with VAT, both down by 10 yuan/t compared with the previous day.

 

Bearish sentiment started to accumulate in the futures market. The most-active coking coal contract on the Dalian Commodity Exchange closed the daytime session at 1,898.5 yuan/t, down 4.72%. The most-active coke contract also slumped 2.96% to 2,603.5 yuan/t.